Has Saylor’s BTC Strategy Hit a Block? ⛔️
Hello dispatchers!
For the first time in what feels like forever, Michael Saylor's Bitcoin-buying machine took a breather. Okay, twice in the last month.
Strategy (formerly MicroStrategy) just revealed in an US Securities and Exchange Commissions (SEC) filing that it made no Bitcoin purchases last week despite …
BTC dipping below $85,000 (a 22% drop from January highs)
The company's stock shedding 24% over two weeks before Monday's recovery
This pause comes as Strategy's stock finds itself caught in conflicting currents – up sharply after Trump's crypto reserve announcement, yet still down a staggering 55% from its November all-time high.
Is the most aggressive Bitcoin acquisition strategy in corporate history showing cracks, or is Saylor simply reloading for the next big move? Let's dive in.
Connect to Web3 Seamlessly, with WalletConnect!
Navigating Web3 can be confusing. Managing multiple wallets and dApps? Even trickier.
WalletConnect makes it effortless — allowing you to access thousands of dApps securely from any device.
Instantly connect your wallet to any dApp
Supports all major wallets and blockchains
Fully encrypted, ensuring top-tier security
No extensions, just scan and connect
Whether you're trading, gaming, or exploring DeFi, WalletConnect keeps you connected—safely and effortlessly.
The best part? It’s free, open-source, and built for the future of Web3.
The Blip in Financial Engineering
Under Michael Saylor's leadership, the firm has amassed 499,096 BTC — approximately 2.3% of Bitcoin's entire circulating supply — worth around $44 billion at current prices.
This audacious accumulation strategy turned Strategy into one of Wall Street's top performers, with the stock gaining more than 1,800% since acquiring its first Bitcoin in August 2020.
Just when Saylor’s strategy appeared to be fool-proof, recent months revealed some cracks beneath the long-term numbers.
Get 17% discount on our annual plans and access our weekly premium features (HashedIn, Wormhole, Rabbit hole and Mempool) and subscribers only posts. Also, show us some love on Twitter and Telegram.
Strategy has lost more than half of its market cap from its November peak with its stock price currently hovering around $275. While Monday saw a 15% surge following Trump's crypto reserve announcement, that enthusiasm quickly faded as Bitcoin retreated below $87,000.
More concerning has been the collapse in Strategy's premium to net asset value (NAV) — essentially how much more investors are willing to pay for the stock beyond the actual value of its Bitcoin holdings. This premium reached a staggering 3.4x in November but has now plunged to just 1.5x, its lowest level since April 2024.
For investors using Strategy stock as a leveraged Bitcoin play, this contraction signals diminishing market confidence in the premium's sustainability.
The pain has been particularly acute for those who ventured into leveraged ETFs tied to Strategy's performance. The T-REX 2X Long MSTR Daily Target ETF (MSTU) has plummeted about 81% since peaking on November 20, including a brutal 40% decline in just three trading sessions last week.
This underperformance highlights the amplified risks of leveraged exposure to an already volatile asset, with one GSR Markets study finding that in choppy market conditions, leveraged ETFs can lag comparable strategies by more than 20% due to the costs of daily rebalancing.
Strategy's most recent financial results also tell a complex story.
While the company reported $120.7 million in software revenue for Q4 2024, it posted a net loss of $670.8 million, largely due to non-cash Bitcoin impairment charges — a sobering reminder that the firm's fortunes remain inextricably tied to Bitcoin's price movements.
Read: MicroStrategy Drops the ‘Micro’ 🎤
The Skipped Dip: Signal or Noise?
Strategy's decision not to purchase Bitcoin during last week's price decline is only the second such instance in the last 14 weeks. Since embarking on its Bitcoin accumulation strategy in 2020, the company has consistently seized market downturns as buying opportunities.
Six weeks ago, in late January, Strategy purchased $1.1 billion worth of Bitcoin at an average price of $105,596 – substantially higher than recent price levels. That acquisition followed another $1 billion purchase in the preceding week. In total, Strategy has spent approximately $5.3 billion on Bitcoin in 2025 alone.
Why hit the pause button now?
The company's SEC filing provided no explanation for the decision, merely confirming that its holdings remained unchanged at 499,096 BTC. The filing did, however, announce a $1.24 per share dividend on its preferred "STRK" stock to be paid at the end of March – perhaps signalling a focus on rewarding current investors rather than expanding its Bitcoin position.
The timing is interesting given Strategy's average purchase price of $66,357 per Bitcoin. Even with the recent market decline, the company's position remains substantially in profit – unlike in January when it purchased near the market top at $105,600.
This raises another possibility: perhaps Strategy is becoming more selective about its entry points, focusing more on value than on absolute accumulation at any price. If true, this would represent a subtle but significant evolution in its approach.
The Debt Question
Strategy's Bitcoin accumulation didn't happen through cash reserves alone. The company has engineered a complex financial structure built around convertible debt that has allowed it to acquire far more Bitcoin than would otherwise be possible.
Read: Saylor Strategy: 0️⃣ Interest, ♾️ Bitcoin?
Currently, Strategy's $44 billion Bitcoin treasury is backed by approximately $8.2 billion in convertible debt, resulting in a leverage ratio of around 19%. This debt comes primarily in the form of convertible notes, including zero-coupon bonds and low-interest instruments with maturities extending through 2028 and 2030.
The most recent offering came in the form of a $2 billion zero-coupon convertible note maturing in 2030, which can be converted to equity at an initial rate of $433.43 per share. This financing mechanism allows Strategy to secure capital without immediate shareholder dilution, while giving noteholders potential upside through future stock appreciation.
Strategy's model is fundamentally reflexive in nature: the company issues equity or debt to fund Bitcoin purchases, which theoretically increases its net asset value, allowing for more capital raises at higher valuations, enabling further Bitcoin acquisitions, and so on. This virtuous cycle worked spectacularly during Bitcoin's uptrend, but faces challenges in more volatile or bearish market conditions.
Read: Corporates Opt Debt To Buy Bitcoin 🛒
This approach has allowed Strategy to weather previous downturns. During Bitcoin's 2022 crash, the company successfully raised $1.8 billion in equity despite challenging market conditions, demonstrating its resilience.
However, the model's sustainability depends on market confidence and Strategy's ability to maintain a premium to its net asset value. With that premium now at a 10-month low of 1.5x (down from 3.4x in November), the efficiency of this financial engineering has diminished. Each new capital raise potentially delivers less Bitcoin per dollar of debt or equity issued.
This declining premium could partly explain Strategy's recent pause in Bitcoin purchases. Without the historical premium, the company's financial leverage loses some of its power, potentially prompting a more measured approach to capital deployment.
Liquidation: Real Risk or Market FUD?
As Strategy's stock price declined sharply last week, social media speculated a potential forced liquidation of the company's Bitcoin holdings.
How realistic is this scenario?
"Forced liquidation of MSTR is not necessarily impossible. But, it is highly unlikely. It would need a 'mayday' situation to occur," The Kobeissi Letter said in its post on X.
Unlike typical margin loans that might trigger automatic liquidations at predetermined price levels, Strategy's convertible notes don't contain such mechanisms. There are no margin calls that would force the company to sell Bitcoin if its price falls below certain thresholds.
The primary protection comes from the structure of Strategy's balance sheet. Even if Bitcoin's price were to plummet by 50% to around $33,000, the company's assets would still exceed its liabilities by over 100%, The Kobeissi’s post said. This provides substantial breathing room before solvency becomes a genuine concern.
Furthermore, Michael Saylor's 46.8% voting stake in the company creates an additional layer of protection. This controlling interest makes it "almost impossible to pass a shareholder vote" that would force Bitcoin sales without his consent. Given Saylor's well-documented Bitcoin maximalism, such approval seems highly improbable.
For a forced liquidation to occur, one of two unlikely scenarios would need to unfold: either a corporate bankruptcy or a stockholder-approved dissolution. Both would require extreme circumstances far beyond current market conditions.
The actual risk for Strategy isn't immediate liquidation but rather potential refinancing challenges when its convertible bonds begin to mature after 2027. If Bitcoin's price remains depressed for an extended period, the company might face difficulties rolling over its debt or raising new capital under favorable terms.
"While not an immediate threat, prolonged weakness could pressure its ability to meet obligations. The key watchpoints are collateral requirements and refinancing options," co-founder of security tokens firm Polymath Trevor Koverko told The Decrypt.
Token Dispatch View 🔍
Strategy's Bitcoin accumulation model is facing its first serious stress test since its inception, and the outcome could reshape institutional approaches to cryptocurrency exposure. The sudden pause in buying, collapsing NAV premium, and stomach-churning drop in leveraged ETFs reveal a fundamental truth: financial engineering has limits, even in the wild west of crypto.
How Strategy's once-reliable premium has contracted to 1.5x, down dramatically from its 3.4x peak is a significant signal that the model isn’t without its Achilles’ heel. This premium is the essential fuel for Saylor's perpetual motion machine. Without it, the virtuous cycle of raise capital → buy Bitcoin → watch NAV rise → raise more capital becomes increasingly difficult to sustain.
The 81% collapse in leveraged Strategy ETFs speaks a lot about amplifying already volatile assets. These instruments worked spectacularly during the uptrend but have become wealth destroyers in choppy markets. Their implosion raises questions about whether institutional investors have truly found appropriate vehicles for Bitcoin exposure - especially during the bear runs or the lull phases of the bull runs.
While forced liquidation remains highly unlikely given Saylor's voting power and the company's reasonable leverage ratio, the challenge exists for real. When those 2028 and 2030 convertible notes mature, Strategy will face a moment of truth. If Bitcoin has surged to new heights, the strategy will be vindicated. If not, refinancing billions in debt may prove challenging.
For now, Strategy's Bitcoin machine has merely paused, not broken. With a 19% leverage ratio and substantial profit cushion at current prices, the company has runway to weather this storm.
As markets digest this phase of Bitcoin's evolution, one thing seems clear: the path from here won't be as mathematically elegant as Saylor's presentations might suggest. Financial engineering always meets reality eventually — even in Bitcoin.
Token Dispatch is a daily crypto newsletter handpicked and crafted with love by human bots. You can find all about us here 🙌
If you want to reach out to 200,000+ subscriber community of the Token Dispatch, you can explore the partnership opportunities with us.
Disclaimer: This newsletter contains sponsored content and affiliate links. All sponsored content is clearly marked. Opinions expressed by sponsors or in sponsored content are their own and do not necessarily reflect the views of this newsletter or its authors. We may receive compensation from featured products/services. Content is for informational purposes only, not financial advice. Trading crypto involves substantial risk - your capital is at risk. Do your own research.